Increasing evidence demonstrates that dysregulation of XBP1 function contributes to tumorigenesis in some cancers. However, little is known about the role of XBP1 in the progression of osteosarcoma (OS). The expression of XBP1 in OS samples was measured by quantitative RT-PCR and Western blotting assays. Cell cycle analysis and cell counting kit 8 (CCK8) assays were performed to determine the effects of XBP1 expression on cells growth capacity. Cell apoptosis coassay was applied to determine cell survival. The expression of genes affected by XBP1 was examined by quantitative RT-RCR and validated by Western blotting assays. XBP1 was overexpressed in OS clinical samples compared with corresponding non-cancerous tissues. Overexpression of XBP1 was significantly associated with advanced clinical stages, high degree of malignancy and low tumor necrosis rate. Furthermore, hypoxia activated XBP1, and silencing XBP1 significantly enhanced OS cell apoptosis. Knock-down of XBP1 resulted in inhibition of OS growth. Most importantly, knockdown of XBP1 led to down-regulation of PIK3R3 and mTOR. Taken together, XBP1 is up-regulated and has a pro-tumor effect in OS with activation of PI3K/mTOR signaling. Thus, targeting XBP1 may provide a new potential therapeutic method for OS.